''Rivals must unite to fix US economy''

The White House on Saturday reacted to a historic downgrade of America''s top-notch debt rating by calling on political rivals to unite to fix the economy and assure the country''s fiscal future. "We must do better to make clear our nation''s will, capacity and commitment to work together to tackle our major fiscal and economic challenges," White House spokesman Jay Carney said in a statement.
Ratings agency Standard & Poor''s cut the US credit rating for the first time in history on Friday from AAA to AA+, saying the gridlocked US political system was increasingly unable to handle a huge fiscal deficit and debt load. The agency added a negative outlook, warning that there was a chance the rating could be downgraded further within two years if progress is not made in cutting the huge government budget gap.
"The president believes it is important that our elected leaders come together to strengthen our economy and put our nation on a stronger fiscal footing," Carney said. "The bipartisan compromise on deficit reduction was an important step in the right direction.
"Yet, the path to getting there took too long and was at times too divisive." Carney noted that President Barack Obama would have preferred a "grand bargain" that would have cut up to $4 trillion from the US debt load, but a deal with top Republican leaders foundered. Instead, Obama and Republicans agreed a deal to raise the US government''s borrowing authority in exchange for around $2.1 trillion in cuts, but critics said the move was insufficient to deal with a huge fiscal gap slowing the US recovery.
Under the deal raising the debt ceiling, Congress will appoint a grand committee to recommend spending cuts, appointed from both warring parties in Congress. "Over the coming weeks, the president will strongly encourage the bipartisan fiscal committee as well as all members of Congress to put our common commitment to a stronger recovery and a sounder long-term fiscal path above our political and ideological differences," Carney said.